XML 49 R11.htm IDEA: XBRL DOCUMENT v2.3.0.15
PENSION PLANS
9 Months Ended
Sep. 30, 2011
PENSION PLANS

NOTE 3 – PENSION PLANS

We historically provided retirement benefits for certain U.S.-based employees through the McDermott (U.S.) Retirement Plan (the “McDermott Plan”) and other supplemental defined pension benefits. The McDermott Plan and the supplemental defined pension benefits are collectively referred to as the “Domestic Plan.” The J. Ray McDermott, S.A. Third Country National Employees Pension Plan (the “TCN Plan”) provides retirement benefits for certain of our foreign employees.

During the quarter ended June 30, 2011, we changed the investment strategy of the McDermott Plan, which caused us to remeasure the plan’s assets and benefit obligations. In connection with the investment strategy change, we increased the expected rate of return on plan assets assumption to 6.50%, as compared to 5.75% at December 31, 2010, which is consistent with the long-term asset returns expected from the portfolio after the investment strategy change. Additionally, we increased the discount rate assumption to 5.40%, as compared to 5.30% at December 31, 2010.

Net periodic benefit cost for the Domestic Plan and the TCN Plan includes the following components:

 

     Domestic Plan  
     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2011     2010     2011     2010  
    

(Unaudited)

(In thousands)

  

Service cost

    $ —        $ —        $ —        $ 409   

Interest cost

      7,129        6,467        21,359        22,406   

Expected return on plan assets

      (8,069 )      (8,177 )      (22,144 )      (23,278 ) 

Recognized net actuarial loss and other

      3,365        3,550        12,087        13,112   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic benefit cost

    $ 2,425      $ 1,840      $ 11,302      $ 12,649   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

     TCN Plan  
     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2011     2010     2011     2010  
    

(Unaudited)

(In thousands)

  

Service cost

    $ 684      $ 505      $ 2,055      $ 1,728   

Interest cost

      594        546        1,784        1,638   

Expected return on plan assets

      (612 )      (457 )      (1,838 )      (1,371 ) 

Recognized net actuarial loss and other

      688        546        2,064        1,638   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic benefit cost

    $ 1,354      $ 1,140      $ 4,065      $ 3,633